45-895.01. Storage of water; availability and disposition of stored water

A. Water that is stored in a state demonstration project, that is purchased with monies from the state water storage fund established by section 45-897.01 and that is eligible for credits in a long-term storage account pursuant to section 45-852.01 shall be credited to a state demonstration subaccount of the conservation district's long-term storage account. The credits in this subaccount shall be used only for municipal and industrial purposes and shall be used only in the county for the benefit of which the state demonstration project was constructed by the conservation district.

B. Water stored in a state demonstration subaccount shall be available for disposition by the director during any time when the director determines either of the following applies:

1. The amount of central Arizona project water available for delivery to central Arizona project municipal and industrial subcontractors is insufficient to meet the contractual entitlements of the subcontractors.

2. There is a significant interruption of the conservation district's ability to make deliveries of central Arizona project water in the county for the benefit of which the state demonstration project was constructed.

C. The director may dispose of water stored pursuant to this article only when one of the conditions described in subsection B of this section exists. The director may dispose of the water to a person, including a person who is not an existing central Arizona project municipal and industrial subcontractor, who has filed a request for the water. In disposing of the water, the director shall take into account the reasonable water needs of persons who have filed requests for the water and the applicable provisions of the state water plan, if any, in effect at the time of the request. The director shall require as a condition of the disposition of water that:

1. The person who receives the water shall pay the conservation district's costs, if any, of recovering, transporting and delivering the water to the person, but the person is not required to pay any other costs of construction, operation or maintenance of the state demonstration project. If monies from the state water storage fund established by section 45-897.01 are used to cover the conservation district's cost of recovering, transporting or delivering the water stored, the person who receives the water shall reimburse the fund for those costs.

2. The person who receives the water shall agree to be bound by the relevant terms and conditions of any applicable contract between the conservation district and the United States.

3. The water disposed of to a person pursuant to this section shall be used only by the person for municipal and industrial purposes in the county for the benefit of which the state demonstration project was constructed.